Could ETPs accelerate crypto adoption?


Disclaimer: The Industry Talk section features information from players in the crypto industry and is not part of the editorial content of

When people think of investing in cryptocurrency, hardly anyone thinks of going to a bank first. René Delrieux, senior product manager at Investing comdirect at Commerzbank in Germany, wants to change that.

Banks are where you open savings accounts, take out home loans, or invest in the stock market. This is not where you are going to invest in one of the most controversial, disruptive, unregulated and volatile assets ever introduced to the financial market.

But more and more clients are asking their bankers for opportunities to invest in cryptocurrencies like bitcoin and Ethereum, without the typical risks consumers face when buying cryptocurrencies directly.

Crypto buyers have traditionally had to open accounts with unregulated companies. A lost password could prevent you from accessing an e-wallet for good, permanently cutting you off thousands or even millions of dollars in assets. Delrieux has a better solution.

Delrieux is working with various stakeholders of the German online broker comdirect, to develop a simple solution for the bank’s clients to enter the crypto market.

Online brokerage houses already deal a lot with Exchange Traded Products (ETPs), passively managed securities that typically track a specific asset or index. Popular examples include ETFs (Exchange Traded Funds), ETCs (Exchange Traded Commodities), and ETNs (Exchange Traded Notes).

These securities can be bought and sold on stock exchanges around the world, just like stocks. Delrieux wants to add a Crypto ETP to the inventory of products available to online brokers, in particular a savings plan offering, which allows clients to invest regularly and for the long term, even with small amounts of capital.

“ETPs are already very prevalent and popular among bank customers,” said Delrieux. “In recent years, asset managers around the world have offered ETPs on single cryptocurrencies or even bundles of different coins.”

“This facilitates entry into the crypto market through regulated securities, which can be bought and sold through a normal trading account on international exchanges.”

Before the advent of crypto ETPs, aspiring crypto buyers had no choice but to buy and sell crypto coins on cryptocurrency exchanges. These offshore companies often face minimal regulatory compliance burdens. Coin dealers have little recourse in the event of fraud or theft.

A Crypto ETP sold by a bank is completely different. “Banks are heavily regulated,” Delrieux pointed out, “and the securities they sell are also heavily regulated – by the SEC in the US, by BaFin in Germany.”

“The concept of a Crypto ETP is similar,” Delrieux concluded. “Create a retail and regulated investment product that provides exposure to an asset that cannot be sold by retail brokers. “

“Government regulators are getting involved to ensure that banks are not selling risky products to unsophisticated investors,” Delrieux said. “Considering that bitcoin peaked at over $ 58,000 in early May, only to drop below $ 35,000 in late May, you can see their perspective.”

Several Crypto ETPs are already traded on the stock exchange. Theoretically, bank customers already have access to it. But many banks are skeptical and apply their own regulations. Some banks simply block Crypto ETPs, refusing to add them to savings plans or charging a high commission to make them less attractive.

By innovating in the crypto offerings of online brokers, Delrieux has launched the largest Crypto ETP savings plan in Europe. Over 2.9 million customers can now trade and invest in crypto on a monthly basis. The plan does not charge any fees or commissions, allowing retail buyers to expose more capital up front.

It is not an easy sale. Delrieux was shunned by compliance officers, questioning whether Crypto ETPs would meet customer needs and pass the regulatory course.

“I’m really happy that our compliance team is monitoring the product launch with a critical eye,” said Delrieux. “Abuse is common in the crypto market, and customers deserve a banking product they can trust.”

Some in the cryptocurrency community don’t like what he does either. For them, the unregulated nature of cryptocurrency is part of the appeal. Inviting government regulators to the party defeats the overall goal.

But Delrieux, himself a crypto investor since 2017, is not giving way. “As a product manager, my focus is on the investment vehicle, not the ideological values ​​of cryptocurrency,” he said. “My goal is to create the safest, most accessible and most profitable asset possible. I see crypto as an asset like any other, with pros and cons, and the potential for long-term and short-term gains.

“The cryptocurrency itself will likely remain unregulated for as long as it can, but regulated crypto-ETPs will create new demand channels. This could not only push the price up, but it could also have a stabilizing effect. There might come a time when cryptocurrency has all the good things libertarian-minded people love, but without the insane volatility. “

“My client profile for our Crypto ETP savings plan feels the same. He’s not a culture warrior or crypto standard-bearer – he just wants to see returns without unreasonable risk. If a regulated asset matches that bill, they’re happy.

If it spreads, Delrieux will have found a solution for individual middle-class investors to enter a hot and unregulated market, but with the confidence factor of a regulated financial instrument.

Author Info

Paul Greenamyer is a freelance writer in the real estate and finance industry. Born and raised in San Diego, he was once attacked by a surfboard he was trying to ride. He attended Brown University in Providence, RI and now resides in Austin, TX. Paul is also a musician, filmmaker and founder of Travel punks.


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